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National Tobacco Administration (NTA)
Annual Report for CY 2013

A. Integrated Farming and Other Income Generating Activities Project (IFOIGAP)

  1. Market-Driven Quality Tobacco Production-Tobacco Contract Growing System (TCGS)

TCGS is a market-oriented production system that assures the tobacco manufacturers and exporters of the volume and quality of tobacco they need; and, at the same time, assures the farmers of the technology, production assistance, technical assistance from seedbedding to delivery of produce, ready market, proper grading, accurate weighing and better prices for their produce, including incentives for good performance, like production quota, 100% delivery, prompt repayment and high nicotine, among others.

For tobacco season CY 2012-2013, NTA assisted a total of 4,415 tobacco farmers with a total area of 3,066 hectares, as against 3,850 tobacco farmers covering a total area of 2,688.90 hectares of the previous tobacco season, showing an increase of 15%, in both the number of tobacco farmers and in the area coverage. The total production assistance increased to 29% from PhP88 M to PhP114 M. Likewise, NTA also facilitated the release of production assistance provided by Tobacco Buyer Firms, GFIs and LGUs to 10,214 tobacco farmers.

Volume and Value of Production/Acceptances
Total tobacco production/acceptances documented, to date, is at 67.665M kilograms, valued at PhP 4.663 billion, as against 64.777 Mkilograms, valued at PhP4.625 billion, or an increase of 4% and 0.82%, respectively, as shown in the table below:

  2011-2012 2012-2013
TobaccoType Volume (M Kgs)  Value (B PhP) Volume (M Kgs) Value (B PhP)
Virginia 40.481 2.990 40.158 2.711
Burley 12,545 0.959 15.028 1.208
Native 11.751 0.676 12.479 0.745
Total 64.777 4.625 67.665 4.664
Data source: NTA Regulation Dept. as of Mar. 2014

GROSS INCOME PER HECTARE, COST OF PRODUCTION PER HECTARE, NET INCOME PER HECTARE

For the tobacco season 2012-13, net income of Virginia, burley and native tobacco farmers increased to 9%, 43% and 32%, from PhP54,000 to PhP59,000 (Virginia); PhP44,000 to PhP63,000 (Burley) and PhP34,000 to PhP45,000), respectively, as shown in the table below:

TYPE/SUBTYPE
2011-12
2012-13
AVE. GROSS SALES/HA
AVE. COST OF PROD/HA
NET INCOME
AVE. GROSS SALES/HA
AVE. COST OF PROD/HA
NET INCOME

VIRGINIA

           
NEUTRAL 125,771.21 85,342.33 40,428.88 145,470.28 105,798.12 39,672.16
IMPROVED FLAVOR 186,313.19 116,410.64 69,902.55 191,092.63 112,452.89 78,639.74
FULL FLAVOR 168,108.30 115,590.68 52,517.62      
AVERAGE 160,064.23 105,781.22 54,283.02 168,281.46 109,125.51 59,155.95
BURLEY            
NEUTRAL 103,828.51 74,537.51 29,291.00 144,612.55 90,731.28 53,881.27
IMPROVED FLAVOR 161,113.60 102,174.79 58,938.81 193,808.82 121,878.65 71,930.17
AVERAGE 132,471.06 88,356.15 44,114.91 169,210.69 106,304.97 62,905.72
NATIVE            
BATEK 121,038.11 74,443.04 46,595.07 121,898.69 67,331.16 54,567.53
CIGAR FILLER 86,692.62 65,244.76 21,447.86 110,654.65 75,315.08 35,339.57
AVERAGE 103,865.37 69,843.90 34,021.47 116,276.67 71,323.12 44,953.55

 

  1. Tobacco Grower of the Year

This contest is being undertaken for farmers under the Tobacco Contract Growing System to encourage them to adopt the recommended technologies for quality tobacco production and give recognition to the role of of their role in the development of the industry. A set of criteria is followed, such as adherence to Good Agricultural Practices, yield, production and innovativeness, among others. For the evaluation of crop year 2012-13 tobacco farmers, a total of 97 contestants from various branches and planting different tobacco types were evaluated but only 20 tobacco farmerscame out as winners. Cash prizes, consolation prizes and plaques amounted to Php447,000. They were awarded in a ceremony last 28 February 2014.

  1. Rice Production Component

As an IFOIGAP component, this is implemented in line with the rice self sufficiency program of the government led by the DA, to augment the income of tobacco farmers, by increasing their yield to at least 5tons/hectare.

For CY 2013, NTA provided production assistance to 1,900 tobacco farmers, covering 1,475 hectares, Total Production Assistance totalled PhP19 million.The targeted production assistance for the year was PhP14.7 million for 1,393 tobacco farmers and 1,271 hectares.

  1. Agripinoy Tobacco Farmers' Food Processing and Trading Center
  2. The IFOIGAP includes value-adding/processing, where in 2012, NTA started the establishment of Agripinoy Tobacco Farmers Food Processing and Trading Center. The project will provide production assistance to tobacco farmers in the production of raw materials- hogs and poultry, which the Plant will buy and process intobagnet, Viganlonganiza, tapa, bacon, etc. and sell to Bagsakan Centers, govt. offices and hospitals in Region 1 and Metro Manila. The Agripinoymilling complex will include a feedmill to cater to the requirement primarily of the farmer-beneficiaries of hog fattening and broiler production; and, a ricemillto cater to the needs of the farmers.

    With regard to its production assistance component, a total of 26 clusters with 262 farmer-cooperators were formed from the different municipalitiesof Ilocos Sur and Abra, to avail of the Hog Fattening Project. An orientation seminar/briefing for the farmers was conducted by NTA and Universal Robina Corporation. Provision of production assistance to tobacco farmers will be done per cycle.

 

B. Tobacco Seed Production and Distribution

    The NTA makes available market-preferred, quality seed varieties to tobacco farmers and tobacco companies, to replace the many, old, degenerated varieties the farmers are using. This is intended to enhance global competitiveness, by ensuring consistency in the volume and quality, of leaf tobacco, as required by local cigar/cigarette manufacturers and exporters.

    For FY 2013, NTA distributed 291kilograms of tobacco seeds of different varietiesbenefitting 14,030farmers from the projected 12,283 farmers.

C. Renewable FuelwoodEnergy Farm Project and Restoration of Ecological Integrity of the Tobacco Growing Regions

    The project, which was provided a PhP51 million budget from the NTA's entitlement of the Tobacco Fund (RA 4155), aims to address the fuelwood and other forest resources requirement of the farmers in the curing of Virginia and other types of tobacco, as well as assist in the reforestation efforts of the tobacco growing regions. It will be implemented from 2013-2016.

    For 2013, a total of 4.6 million tree seedlings (giant ipil-ipil, gimelina, mahogany, etc.), were planted for the tree seedling nursery module . Out of the total,96,000bamboo seedlings were raised, the produce from the planting of which will be used for curing structures, poles and sticks.

    For the Pangkabuhayan or grow-out module, a total of 3.4 million trees were planted to an area of 1,374 hectares (or 97% of targeted 1,400 hectares for year).1,502 out of the 1,500 targetedfarmer-cooperators benefitted from the project.

    Last 30 July 2013, NTA successfully conducted the Synchronized Tree Planting Day, an inter-agency and inter-sectoral action for the restoration of ecological integrity, where 85,811 people participated, planting551,636 tree seedlings.

D. Regulatory Services Program

    This program involves the exercise of regulatory authority of the NTA, to include the supervision of tobacco trading operations, the implementation of regulatory procedures on the redrying, preliminary processing of tobacco leaf andit also covers the setting up of floor prices for tobacco through the conduct of the biennial tripartite conference.

    More specifically, the activities were undertaken under the program:

    1. Licensing, Monitoring and Supervision of Leaf Trading Operations

    • Registered, licensed, monitored and supervised operations of 49 Trading Centers in Regions 1 and 2 were registered/licensed; 9 Wholesale Tobacco Dealersand4Redrying Plants.

    2. Monitoring and Supervision of Tobacco Exportation and Importation

    • Issued a total of 2,442 export/import clearances for leaf tobacco and 2,831 export/import clearances for tobacco products/cigarettes.

    3. Tobacco Tripartite Consultative Conference

    The tripartite consultative conference was held to review and adjust the floor prices of locally-grown leaf tobacco. Floor price means the minimum price that the government/NTA will allow the tobacco buyer firms to buy from tobacco farmers, per kilo, per grade, per type of tobacco leaf.

    Participated by tobacco farmer leaders, cigarette manufacturers, wholesale tobacco dealers and LGUs, the following increases were agreed upon last 05 September 2013:

    Virginia tobacco was increased by PhP6.00, across all grades; Burley tobacco Php10 for A-B, PhP6 for C and PhP3 for D-R; and, Native tobacco, PhP10 for HG-M1, PhP7 for M2-L1, and PhP4 for L2, to encourage production of High grade/quality tobacco.

E. Farmers Organizational Development

    From being traditional recipients of government's assistance, this program aims towards nurturing the tobacco farmers to become truly self-reliant, self-sufficient and food secured. Through the formation of honest–to-goodness tobacco-based cooperatives, the tobacco farmers will be given the opportunity to develop technical, leadership, entrepreneurial and management capabilities alongside, financial capability development. The activities conducted for 2013 include:

    • Re-orientation of the FOD objectives to a total of 1,028 farmers' associations and cooperatives in NTA's area of coverage in Regions 1, 2 & Occ. Mindoro;
    • Conducted Leadership & Values Orientation in I. Norte in coordination with the CDA for 50 participants; Basic Accounting in Isabela for 31 participants; Basic Cooperative Course in Candon and Cagayan for 45 attendees and 30 attendees, respectively;
    • Values Orientation and Tobacco Production Technology in 8 NTA Branches attended by a total of 5,000 tobacco farmers;
    • Conducted field tours participated by NTA extension personnel and farmer leaders at the Agripinoy Food Processing Plant in I. Sur (172) and a bamboo plantation in Alaminos, Pangasinan (21 participants).

F. Technology Development and Services in support of Market-Driven Quality Tobacco Production

The program involves the continuing, systematic testing, development, introduction, transfer and adoption of yield-increasing, quality enhancing, environment friendly, income-increasing and competitiveness enhancing production and processing technologies to address specific volume and quality requirements for domestic manufacturing and for exports.

The following projects/activities are being conducted:
    • Improvement of Curing Structures and Processes for Virginia Tobacco
    • Production, Evaluation and Application of Vermicompost on Tobacco
    • Development of Organic Fertilization Scheme for Tobacco
    • Tobacco Pest Clinic/ Quick Response System

G. Quality Assurance/Analytical Services

    (NTA has laboratories at NTA Research and Training Center in Batac, Ilocos Norte and at the NTA Central Office, Quezon City- Quality Assurance Laboratory) 

    Annually, in addition to requests from the various sectors that are being responded, the NTA’s quality assurance activities include the following:

    • Continuing monitoring of soil fertility, chloride determination and water quality of major tobacco growing areas
    • Fertilizer and pesticide analyses
    • Monitoring/Analysis of Physico-Chemical Quality of Tobacco Production, using various technology applications, across locations
    • Monitoring of quality of tobacco leaf and tobacco products being exported and imported

    Quality assurance/Chemical analysis of tobacco leaves, tobacco products and by- products include analysis of nicotine, tar and carbon monoxide; and, the detection of presence and levels of hazardous chemicals/carcinogenic substances

    Other activities include the preparation of the implementing rules and guidelines on the harmonized grades of locally-grown leaf tobacco, agrading and classification system based on the internationally accepted standards. This will be presented to the Tobacco Buyer Firms and other stakeholders and will serve as a guide in setting up floor prices of tobacco.

H. Development and Commercialization of Other Uses of Tobacco

In response to the anti-smoking campaigns, enhancing global competitiveness, addressing public health consciousness and effective regulation, the continuing development and commercialization of the other industrial uses of tobacco to increase its utility. Among the other industrial uses/ products are tobacco pulp and paper from tobacco stalks, tobacco dusts as molluscicide cum fertilizer for aquaculture application; tobacco extracts as pesticide for fruit trees, vegetables and ornamentals, ethanol, veterinary products.

To be able to encourage the production of tobacco handmade paper, the agency is undertaking a "Village-Level Production of Tobacco Handmade Paper", activities include: packaging of the Tobacco Handmade Paper Technology, preparation of training module, scouting of cooperatives in coordination with the Farmers Organizational Development project, dialogue with officials and members of cooperatives and the first training is scheduled on 16-20 December 2013.

I. Scholarship Program  for Tobacco Farmers Dependents (pursuant to RA 9211)

    For the year, the NTA continued the scholarship program for tobacco farmers' children, pursuant to RA 9211, Tobacco Free Education Program (TFEP) and in affirmation to the Administration's thrust of giving priority to the primary stakeholders of the industry, the tobacco farmers. As of date it has extended financial assistance to the new batch of 386 scholars, enrolled in 4-year and vocational/technical courses, in state colleges and universities in Regions I, II and CAR. A total budget of PhP3.00 million was allotted for School Year 2012-2013, for 414 slots, which is intended to be continuously increased in the ensuring school years.

J. Communication Support Program/Values Re-orientation
  1. Conducted continuing active consultation with the tobacco private sector and tobacco farmers groups on matters affecting the local tobacco industry, amidst the global campaign against tobacco and smoking, including the legislative agenda in both houses of congress;
  2. Implemented the "Oras ni Mannalon ti Tabako" radio programs for a more active information dissemination and consultation, and reach out to far-flung areas of the regions; and,
  3. Distributed 10,000 "techno-calendars" in the local dialect; published a quarterly "Tobacco News" and regularly hold press conferences with the media.

K. Planning and Information Technology Management Services

  1. Prepared Agency Plan and Budget for 2013 and 2014;
  2. Prepared position papers for Congress on mitigation measures for R.A. 10351 (Sin Tax Law);